September 08, 2020

Looking Backward: How Did We Get Here? (Part 1 of 3)

It is not difficult for a nonprofit executive director or CEO to describe the current strategic position of their organization. To test this, ask the three following questions:

1. What services do you provide, and for whom?

2. How are you different from others providing similar services?

3. Who pays to support your work?

The responses to these three questions reveal the three aspects of a nonprofit strategic position: the program position (question 1), the market position (question 2), and the resource position (question 3). Together these three position statements articulate the strategic sweet spot by which the nonprofit believes it can provide the most significant mission impact in the most sustainable manner.

It’s just as important, knowing where you are and how you got there. What were the major milestones and decision points that occurred from the time of the organization’s founding until now? And, more importantly, what do these events tell us about your strategic motivations, whether implicit or explicit?

Hidden away in this rich history of organizational decisions are patterns, themes, or trends that can be mined for insight. Have our decisions been consistent or inconsistent? Have our shifts been intentional or accidental, driven by internal or external forces? The treasure we seek in digging through the past are clues about the drivers of our organizational strategy that got us to our current strategic position.

Typically, strategy drivers come in three forms.

A client-driven strategy is where program and resource decisions are made in response to the changing needs of your target population. Strategic growth under a client-driven strategy is defined as either addressing a wider range of needs of the target population and/or reaching more people in that population. An example of client-driven growth is the addition of employment services by an agency serving adults with developmental disabilities.

Under a service-driven strategy, strategic growth is built on the competencies and expertise of the organization. Strategic development under this scenario means that the organization will use its program assets to reach different populations who can benefit from its core services. An example of service-driven growth is an organization that provides in-patient counseling to youth establishing community-based counseling centers to serve the general population.

Finally, we have a domain-driven strategy, which the organization responds to the changing needs and preferences of its key external stakeholders. An example of domain-driven growth is an environmental restoration organization that moves into land preservation in response to demand from its membership. A clear illustration of a domain-driven strategy in the social services is when government agencies provide funding with restrictions on the type, level, and duration of service allowed.

To make a strategic sense of our organizational history, the concept of the strategy-driver is the lens we employ. Have our program and resource decisions been driven consistently by one of the three primary drivers? If not, was there a point at which we shifted intentionally from one to the other?

Conversely, have we employed different drivers at different times in our history? Is there a pattern of inconsistency in these shifts?

Mapping your history with the use of the strategy driver lays bare the nature of your strategic evolution. Point A may have led logically to point B, which in turn led the organization to point C. However, the critical question in terms of strategy is whether point C can be connected directly and logically back to point A.

The good news is that there are no wrong answers to these questions. There is only clarity to be gained. The insights from this first phase of strategy development merely set the stage for the second stage, which is looking inward.

That is the topic for the next installment in this series.

Need Additional Assistance?

If you are interested in going deeper into your nonprofit strategy or if you wish to review your organizational strategy more broadly, click the link below to schedule a 30-minute phone or zoom consultation with Mike Stone.

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